Question

Your family plans to start a small business in your neighborhood. Your father borrows $10,000 from the bank at an annual interest rate of 8% rate for 36 months. What is the amount of interest he will pay on this loan? (use Interest = Principal × Rate × Time)

Answer 1

$2400

Explanation:

First, converting R percent to r a decimal

r = R/100 = 8%/100 = 0.08 per year,

putting time into years for simplicity,

36 months ÷ 12 months/year = 3 years,

then, solving our equation

I = 10000 × 0.08 × 3 = 2400

I = $ 2,400.00

The simple interest accumulated

on a principal of $ 10,000.00

at a rate of 8% per year

for 3 years (36 months) is $ 2,400.00.